Saga: It is essential we have radical reform of the state pension

Ros Altmann, director general of Saga explains why the single-tier pension,
where everyone will receive a flat rate of around £140 a week, will take
complexity out of our current system.

10:03PM GMT 11 Jan 2013

Government’s proposed single-tier state pension will see the end of the so-called ‘state second pension’ or S2P, which tops up the weekly basic state pension for all people who made national insurance contributions over their working life.

Currently, around one million high earners approaching retirement can expect to receive around £160 a week when they stop working through their combined basic state pension of £107.45 a week plus their S2P.

However under the single-tier pension, everyone will receive a flat rate of around £140 a week.

Ros Altmann, director general of Saga, said: "There will be transition issues but I think the principle of establishing for the future a flat rate state pension, which makes it safer to save is vital.

"There will be many people who are better off particularly women. There is no perfect solution but I think this is absolutely essential."